With affirmative action admissions in the Supreme Court, I thought about my days at good old Cornell. Cornell has few blacks and most live in the self segregating dorm or the all black fraternities and sororities. When the Ivy league signed a pact to not offer sports scholarships to retain some integrity in their programs and scholastics, they probably did not forsee the money machine big time football and basketball would become. Had they anticipated it, they would have never added that rule, and they would have minted tax free money through their programs. Since they are not competitive in big money sports, they don't make a good money by having sports teams. If I had to bet, I'd say they actually lose money on operating all teams except men's hockey (ivy League = great hockey). They do compete in sports other than football or basketball, but why do they keep them around? The same could be said for small lbieral arts colleges throughout the Northeast like Swarthmore, Williams and Bates. It's rather ugly, but it comes down to donors and minority admissions.
If alumni played a sport at an elite college, they would have a dedicated reason for donating money. They are giving it back to their old tennis program or the soccer squad. It creates a connection between the big university and the individual student that is outside the grueling academic setting. A positive impression may be left or nostalgia. Not just for alumni, but this is a donor avenue for parents of prospective students. Cornell received plenty of donations from a wealthy type A financial guru, and surprisingly, his son made the team (family is worth a post: vehicular homicide, pro tennis, money, corrupt courts). He was good, but dad wanted to make sure one of his boys went to an Ivy. This is an alternative source for fundraising.
The other reason is a bit uglier, but it is helping the minority, specifically black, admission numbers. I love to pick on Cornell as it was my alma mater. Familiarity breeds contempt. Cornell has a whopping 588 african american students out of 13,950. That is a low 4%. It's well below proportional representation to the black population of the USA (12.5%). Cornell avoids fire from black groups as they have an AA studies program as well as a self segregating black dorm. Those were the prizes of the black student takeover of the student union in 1968. The even sadder picture of the 588 black student number is that at least 72 of those students are athletes. I went through roster pictures. I'd bump that up to 80 depending on the mixed race issue. One in eight black students on campus is an athlete. Without athletic exceptions, black enrollment drops to 3.5%.
Sports are a way to supplement the selection of black students for elite universities. Without sports, these schools would be even harder pressed to find the applicants to fill the bare minimum of what they have to have for non-asian minority enrollment. Sports might be an operating loss for these universities, but they have their positives. They act as a different donor source. Sports act as a supplement for black admissions that shields these schools from criticism of their like minded liberal friends. Due to the visibility of sports, the impression is made that schools like Cornell are more diverse than they really are. If these sports programs lose money, it is simply a write off for politically correct protection.